by Christopher S. Rugaber, Associated Press

by Christopher S. Rugaber, Associated Press

The Labor Department says applications rose 4,000 to a seasonally adjusted 371,000, the most in five weeks.

The four-week average, a less volatile measure, increased 6,750 to 365,750, after falling to a four-year low the previous week.

Last week's claims were revised down, from an initial estimate of 372,000, to 367,000.

A department spokesman says all states reported and none were estimated this week. In the previous two weeks, many states were estimated because they weren't able to report over the holidays.

Weekly applications are a proxy for layoffs. They have fluctuated for most of the past 12 months between 360,000 and 390,000. At the same time, employers added an average of 153,000 jobs a month in 2012, the same as in 2011.

Employers added 155,000 jobs in December, the department said last week, while the unemployment rate remained 7.8%. The gain in hiring nearly matched the average of 153,000 jobs per month in 2011 and 2012. That's just been enough to slowly push down the unemployment rate, which fell 0.7 percentage points in 2012.

December's steady job gain suggests employers didn't cut back on hiring in the midst of the debate over the tax and spending changes known as the fiscal cliff. Many economists feared that the prospect of higher taxes and steep cuts in federal spending would cause a slowdown in job gains.

That's a good sign, since more budget showdowns are expected. Congress must vote to raise the government's $16.4 trillion borrowing limit by around late February. If not, the government risks defaulting on its debt. Republicans will likely demand deep spending cuts as the price of raising the debt limit.

Still, hiring is too weak to rapidly reduce the number of unemployed, which stands at 12.2 million. That's far higher than the 7.6 million who were out of work when the Great Recession began in December 2007.

There are signs the U.S. economy is improving. The once-battered housing market is recovering, which should lead to more construction jobs in the coming months. A gauge of U.S. service firms' business activity expanded in December by the most in nearly a year. Auto sales for 2012 were the best in five years. And Americans spent more at the end of the crucial holiday shopping season.

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